The project will develop a tool to:
- Assist in Power Purcase Agreements (PPA) development and improve decision making:
a. Estimate the future costs of different energy and network supply contracts for large energy consumers, building on existing UNSW tariff analysis tools
b. Assess potential on-site renewable energy deployment options in terms of technical and environmental performance and financial viability
c. Explore opportunities for off-site renewables deployment through different possible PPAs, and associated retailer tariffs, building on CRCLCL RP1032
d. Evaluate possible demand-side options to increase the value of both on-site and off-site renewables deployment.
- Assist in PPA monitoring, to ensure value for energy consumers:
The tool will be applied during the operation of a PPA in order to monitor energy, carbon certificates and financial transactions (using UNSW Facilities’ PPA, on-site renewables and demand management as a case study). The tool will assist large energy consumers, buyers’ groups and local government to reduce their carbon emissions in a cost-effective and low-risk manner.
Program
Project leader
Jose Bilbao, UNSW
Project status
Complete
Project period
10/2018 to 06/2019
CRCLCL Project Reports
RP1032u1: Financial Assessment Tool to Assist Large Energy Consumers with Energy Contracting and Clean Energy Options, as well as Off-Site Renewables
Power Purchase Agreements (PPAs) with utility-scale renewable energy plants allow medium to large-scale electricity consumers to meet a proportion of their load demand using renewable electricity. This allows them to reduce their greenhouse has (GHG) emissions, while at the same time reducing their exposure to volatile and peak prices in the National Electricity Market (NEM).
However, due to the structure of the NEM such agreements must be brokered through a retailer and involve several other parties. Hence, these agreements involve complexity around allocation of the benefits and risk associated with the renewable energy project, and the residual load that must be met via the retailer. There is therefore uncertainty around the financial case for projects, and how this compare to other options such as on-site projects. There conditions create significant barriers to the uptake of renewable energy PPAs.
Once a PPA has been entered into, there is also significant additional complexity for the energy consumer to track and report the financial and environmental outcomes of the project, including carbon certificates, and ensure that the terms of the contract are met.
As a result, UNSW has developed a PPA Tool Set to assist in the creation of cash flow models for Renewable PPAs. The PPA Tool Set consists of four Microsoft Excel workbooks, all of which are available on the Centre for Energy and Environmental Markets’ website:
http://www.ceem.unsw.edu.au/renewable-ppa-tool.
The Renewable PPA Tool Set is intended to assist large energy users, energy consumers, buyers’ groups and local government to:
- Model Renewable PPAs under different scenarios and conditions, so to assess their financial benefits and risks, and therefore help meeting their renewables and emissions goals
- Assist in the monitoring of Renewable PPAs, to ensure value for energy consumers
This project builds upon previous projects that involved over 50 stakeholder interviews, analysis of market survey data to distil participant drivers and preferences, six project case studies, and two stakeholder engagement workshops.